15 Jan 2019
Over the last century, there has been a strong correlation between a nation’s consumption of electricity and its economic activity. And consumption, of course, depends on the widespread delivery of electricity resources. As of the late 1970s, a little more than 60% of China had electricity. Now, it’s nearly universal, and in the interim, China has become the world’s second largest economy.

India is following in China’s footsteps and connecting huge numbers of its citizens to energy and electricity access. New research shows that it’s having considerable success. But there are still many hurdles to clear in what is a hugely complicated process.

The Access to Clean Cooking Energy and Electricity – Survey of States (ACCESS) 2018 studyby the Council on Energy, Environment and Water, which was co-funded by the Lee Kuan Yew School of Public Policy, looked at six of the most energy-deprived Indian states, surveying more than 9,000 households from 756 villages in 54 districts. It found that access to electricity improved from 44% to 80% between 2015 and 2018, while the median daily supply increased from 12 to 16 hours.

Over the same period, the number of households cooking with clean cooking energy sources such as liquefied petroleum gas (LPG) instead of wood stoves or dung increased from 14% to 22%.

Who pays?

But there are many complications that are making progress difficult. One of which is India’s convoluted energy distribution system, which favours some consumers over others.

Due to decades-old policies aimed at helping farmers, agricultural businesses receive extremely low cost power. The government’s solution is a technical one: it splits the power between farms and domestic consumers and meters them separately. The subsidised power is enough for farms to manage their businesses, but there are caps on how much each farm can use. Households pay more but get more reliable power. Even so, residential power is often sold at a loss too.

“It is the industrial and commercial consumers who are cross-subsidising agricultural and domestic users by paying higher tariffs. Even in a state where electricity is expensive, such as Maharashtra, the peak electricity tariff for domestic consumers is still far below the average cost of supplying electricity,” explains Assistant Professor Namrata Chindarkar from the Lee Kuan Yew School of Public Policy, the study’s co-Principal Investigator.

This, of course, is a problem for India’s push to Industrialise. It is unsustainable for utilities to sell power at a loss. And although the government is trying to grow manufacturing through its Make in India campaign, companies might look elsewhere if they are paying for everyone else.

Cooking up trouble

The picture is just as complex for LPG gas. Although heavily subsidised, it relies on physical distribution channels, which means that usage remains low even among the rural poor.

“It is still surprising — the number of people who depend on traditional fuels, such as wood stoves and burning cow dung for cooking, and that is as hazardous to health as any kind of severe air pollution,” says Chindarkar.

Some of the reasons limiting the use of LPG are cultural and habitual, for example some users revert back to their wood-burning stove to make roti because they prefer the taste.

And cost is still a major factor. The subsidies mostly benefit relatively well-off Indians who live closer to cities. The government, however, is currently redesigning its policies to better target the rural poor.

Clean and green

The situation is further complicated by environmental concerns. Due primarily to its huge population, India is the world’s third largest carbon emitter (although it is not even in the top 40 on a per capita basis). It is also a signatory to the Paris Agreement on Climate Change. Most of India’s power comes from coal, but it is aiming for a target of 40% renewable energy by 2030.

Can this target be achieved while simultaneously providing electricity to hundreds of millions of new customers?

“You cannot really decouple development goals from environmental goals here,” says Chindarkar, “We have to look at it together. How do we give access to so many people without actually harming the environment?”

Renewable energy sources will certainly help, she adds. India has doubled its use of solar since 2016 and Prime Minister Modi has promised “175GW of electricity from renewables by 2022.” But the answer might come in the form of massive hydroelectric projects that the Indian government is currently negotiating with neighbouring Nepal and Bhutan.

Progress and pain

Although there are certainly challenges ahead, the ACCESS 2018 report finds that access to clean cooking energy and electricity is improving. That means a better standard of living for potentially hundreds of millions of people. Without power, they would be left behind.

As Professor Chindarkar pointed out, electricity is about much more than just lighting. It affects educational attainment, by giving people more time to study after dark. It increases access to healthcare by allowing equipment in remote clinics to function properly. It provides so many advantages in life that those of us with an uninterrupted supply, take for granted.